June 22, 2023
Top 10 Stock Smiths Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Smiths – Top 10 Stock in FTSE 100 Index
Smiths is listed as a top 10 stock on June 22, 2023 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 80 (top 80% performer), Obermatt assesses an overall strong buy recommendation for Smiths on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Industrial Conglomerates |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Employee Focus EU |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Smiths Strong Buy
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 80 |
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ANALYSIS: With an Obermatt 360° View of 80 (better than 80% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Smiths are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Smiths. The consolidated Value Rank has an attractive rank of 81, which means that the share price of Smiths is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 81% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 67, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 51. But the company’s financing is risky with a Safety rank of 45. This means 55% of comparable companies have a safer financing structure than Smiths. ...read more
RECOMMENDATION: With a 360° View of 80, Smiths is better positioned than 80% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 81), above-average growth (Growth Rank of 67), and positive market sentiment in the professional investor community (Sentiment Rank of 51), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 45), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Smiths is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Smiths positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock Smiths is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Smiths. Analyst Opinions are at a rank of 41 (worse than 59% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Smiths. Even better, the Professional Investors rank is 57, meaning that professional investors hold more stock in this company than in 57% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 80, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 80% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Smiths has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Smiths Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2023, Smiths shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Smiths. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 64 which means that the stock price compared with what market professionals expect for future profits is lower than for 64% of comparable companies, indicating a good value concerning Smiths's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 71, and for Dividend Yield with a Dividend Yield Rank of 77. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 51% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 49). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a strong buy recommendation based on Smiths's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Smiths has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Smiths shares. ...read more
Growth Strategy: Smiths Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Smiths shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Smiths. Profit Growth has a rank of 76 which means that currently professionals expect the company to grow its profits more than 76% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 80, and Stock Returns has a rank of 65 which means that the stock returns have recently been above 65% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 10 (90% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a BUY recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Smiths Debt Financing Safety below-average
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 50 |
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| REFINANCING | ||||||||
| REFINANCING | 53 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 34 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 45 |
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ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Smiths has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Smiths is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Smiths.Leverage is at 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors.Refinancing is at a rank of 53, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. Liquidity is at 34, meaning that the company generates less profit to service its debt than 66% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 45 (worse than 55% compared with alternatives), Smiths has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Smiths Top Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| COMBINED | ||||||||
| COMBINED | 80 |
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ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% compared with investment alternatives), Smiths (Industrial Conglomerates, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Smiths are a good value (attractively priced) with a consolidated Obermatt Value Rank of 81 (better than 81% of alternatives), show above-average growth (Growth Rank of 67) but are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 80, is a strong buy recommendation based on Smiths's financial characteristics. As the company Smiths's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 81) and above-average growth (Obermatt Growth Rank of 67), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 45) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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